Flanked by Assembly Speaker John Perez, D-Los Angeles, left, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, Gov. Jerry Brown gives his State of the State address at the Capitol in Sacramento, Calif., Thursday, Jan. 24, 2013. Brown delivered a State of the State address that laid out the legacy-building ideas he will work on during the second part of his term, including K-12 education reform, high-speed rail and the largest upgrade to the state's water-delivery system in decades. (AP Photo/The Sacramento Bee, Hector Amezcua) MAGS OUT; LOCAL TV OUT (KCRA3, KXTV10, KOVR13, KUVS19, KMAZ31, KTXL40); MANDATORY CREDIT less

Flanked by Assembly Speaker John Perez, D-Los Angeles, left, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, Gov. Jerry Brown gives his State of the State address at the Capitol in ... more

Photo: Hector Amezcua, Associated Press

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California budget talks at key juncture

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Sacramento --

The constitutional deadline for the Legislature to pass a spending plan for the coming fiscal year is less than a week away, but budget negotiations at the Capitol stayed behind closed doors over the weekend with the staff of lawmakers and Gov. Jerry Brown meeting to seek compromise on major outstanding issues.

For the first time in years, the negotiations weren't about cutting spending. They were focused on just how much tax revenue will be projected to come into California's coffers next year, a new formula to fund schools and how to implement the federal Affordable Care Act through the state's Medi-Cal program.

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Those discussions came as President Obama praised the state for its work on implementing the law during a trip to the Bay Area and Rancho Mirage (Riverside County) on Friday.

Guiding the discussions is whether to assume that the state will collect $97.2 billion in tax revenue, as Brown's Department of Finance estimates, or whether it will be the $100 billion that the Legislative Analyst's Office has projected.

Upbeat assessment

On Friday, state Senate President Pro Tem Darrell Steinberg, D-Sacramento, said either figure would be sufficient to allow lawmakers and the governor to "come together" on a spending plan for the 2013-14 fiscal year that begins July 1.

"I'm not saying we have agreed to (the governor's estimate), but I am saying that the negotiations are going well, and I'm confident that we can find common ground here," Steinberg said.

Lawmakers expect to finalize their proposal on Monday.

Administration officials also expressed confidence that the negotiations would result in a relatively pain-free budget process, unlike those of the past few years, when California leaders had to dig out of a hole that was tens of billions of dollars deep.

"We think that things are moving in the right direction," said H.D. Palmer, spokesman for the Department of Finance. He cited the spending reductions that were part of Brown's previous budgets and the passage of Proposition 30 in November as significant factors in the talks.

Unresolved matters

"We're not trying to outrun a boulder and dodge the poison darts," Palmer said.

Still, significant issues remain unresolved. Besides the revenue figure, a top debate is over a new funding mechanism for K-12 public schools and community colleges. Brown wants extra funding to go to districts with high concentrations of low-income students, students learning English as a second language and students who are in the foster-care system.

Democrats in the Legislature say they support that goal, but think the governor's formula could result in some suburban districts having less funding than they would otherwise.

Also, Brown wants to shift $300 million in funding for county health care programs to the state as part of the implementation of the Affordable Care Act, which Steinberg called a "number that will probably change."

But with the turnaround in state finances, leaders of both houses of the Legislature have things they want to see included in the new budget. For Steinberg, that's $142 million for new mental health care services to put workers in places like emergency rooms and county jails to guide people who need help to the places where it is offered.

Education fund

Assembly Speaker John Pérez, D-Los Angeles, has made a priority of creating a fund to help university students from middle-class families pay for school. He has proposed spending as much as $200 million this year (and $460 million ongoing to cover both semesters) in order to cut tuition and fees by 40 percent for families making less than $150,000 a year.

"We are working diligently toward approving our third consecutive on-time budget," said John Vigna, spokesman for Pérez. "The governor's proposal and the (Assembly proposal) reflect the same priorities of continuing fiscal responsibility and strengthening the middle class."